Microsoft Creates Server and Cloud Division

By Anne Watkins

12/14/2009

Microsoft formed a new organization within its Server and Tools Business last week called the Server and Cloud Division (SCD).

The new division combines the Windows Server and Solutions group with the Windows Azure group. The move underscores Microsoft's confidence in its Windows Azure cloud computing business, which will have its service debut on January 1. A number of companies have already entered the space, including Amazon Elastic Compute Cloud (Amazon EC2), which launched in full production in October 2008, Google App Engine and VMware vCloud, among others.

Microsoft described the reorganization as stemming from a "natural evolution" of Windows Azure toward becoming a mainstream business. Windows Azure got special attention last month at Microsoft's Professional Developers Conference where the company unveiled a new AppFabric for Windows Server 2008 R2. Microsoft is promising that AppFabric will provide a common developer experience, both on premises and in the Internet cloud.

"Microsoft is aiming to provide a consistent feature set and technologies for their on-premises and online offerings to make it easier for customers to move applications between private and hosted environments and to make hybrid deployments more manageable," said Rob Sanfilippo, research vice president for developer tools and strategies at Directions on Microsoft.

There likely will be little impact immediately noticed by customers and partners since the groups already have been sharing technology, Sanfilippo said. However, a positive effect could come from a clearer organizational relationship between the groups.

The nature of Windows Azure also will change as it moves from research to a production service.

"Azure has been in more of an incubatory state and has thus been able to change direction quickly, such as with the redesign of SQL Azure Database (formerly SQL Data Services) to move from an entity-based model to a transaction-supporting relational database," Sanfilippo said. "In its new group, Azure may have less leeway to make quick innovations like that."

In general, while Microsoft has made some "develop once and deploy on either platform"-type efforts -- promising a unified experience between cloud- and premises-based software (such as AppFabric) -- the company hasn't quite arrived there yet. Sanfilippo noted that some refactoring will be required to move many on-premises applications into Azure.

The SCD reorganization "better aligns our resources with our strategy," according to the Windows Azure blog, noting that key components of the strategy include Windows Server, Windows Azure, SQL Server, SQL Azure, Visual Studio and System Center. In the reorganization, Amitabh Srivastava, senior vice president, will lead the newly formed SCD, which will report to Bob Muglia, president of the Server and Tools Division.

Windows Azure services are currently free to evaluate through January 2010. Microsoft plans to begin charging customers on Feb. 1, 2010.